![Crypto Terms Glossary: What is Futures? Crypto Terms Glossary: What is Futures?](/img/184/628/what-is-futures-sm.webp)
Futures are derivative contracts for the purchase or sale of a security or commodity for a pre-set price at a future date. At the futures' expiration date, the buyer has the obligation to buy the underlying asset, while the seller has the obligation to sell it. The value of the futures contract is based on assets like commodities, currencies, indexes, or stocks. Futures contracts are traded on exchanges and are used for income generation, hedging, speculation, and other purposes. There are a variety of cryptocurrency applications, including bitcoin (BTC) futures, which represent future agreements to trade BTC.